Gold Negative For Year After Jobs Report

New York (Mar 7)  The majority of commodities were hit hard this week, led by gold and grains, as a strong dollar weighed on prices. At the same time, a big selloff on Friday sent stock markets into negative territory for the week. The S&P 500 lost more than 1 percent, slicing its year-to-date gain to barely 1 percent.

Macroeconomic Highlights

A strong U.S. jobs report on Friday sent markets into a frenzy on Friday as stocks and bonds got hit, while the dollar surged. According to the Bureau of Labor Statistics, employers added 295K jobs in February, much more than the expected 235K. At the same time, the unemployment rate ticked down from 5.7 to 5.5 percent, better than anticipated, and the lowest level since 2008.

The news sent the 10-year bond yield up by 13 basis points to 2.25 percent, the highest level of the year as traders speculated that the Federal Reserve may be forced to hike its benchmark overnight interest rate soon. Meanwhile, the U.S. Dollar Index rocketed 1.3 percent higher to a fresh 11-year high at 97.70. The euro was hit especially hard against the greenback, falling to 1.085.

In other news, on Thursday, European Central Bank President Mario Draghi outlined some of the details of the quantitative easing program that the central bank announced in January. Draghi said that the QE program will begin Monday and that the ECB will purchase 60 billion euros worth of assets per month through at least September 2016.

The benefit of QE and lower oil prices may help the eurozone economy grow by 1.5 percent this year, according to the latest ECB forecasts. That's better than the previously expected 1 percent. In 2016, growth may accelerate to 1.9 percent.

Source: HardAssets